Will UberEats (Or Doordash, etc..) survive long term?

[s0me0nesmind1]

Got me thinking of this lately -

Basically - No one wins with UberEats right now.



Restaurants hate it because with all of the fees, plus the actual costs of the food they barely get anything profitable out of it if any.

UberEats drivers hate it because they don't really make much money off of it. I mean how many times in an hour can you pick up a meal and deliver it to someone? Twice? 3 times if you're fast and get lucky with how close they are? Each one gets you a few dollars and maybe another $3-10 depending on tips.... But then you have to factor in how much of that goes to car maintenance + gallons of fuel.... Then on top of that - they have to pay taxes on that as income.

Uber themselves don't make a profit. Or anything remotely close to it right now.

Majority of customers will only use it if they have some type of promo like free delivery with 20% off or something. Otherwise for the majority of restaurants we would all just order to-go and pick it up for free.

So no one right now is really "winning"




So right now UberEats is basically clashing it out with the other delivery companies... DoorDash, Postmates, Grubhub, and others. But like I said, most people will only use it IF they have a promotion. I'm sure there are others with money to waste - But the large majority of folks won't.

So even if UberEats wins out the market and competition falls and they jack up prices... Will anyone still use it?

 

[sandorski]

Given the selection of Restaurants that previously did not Deliver, I think such services will survive in larger Cities at east. If not, it really depends on how they are impacting Restaurants. If they are benefiting, I could see this kind of service existing as a more local Restaurant Cooperative or small Courier Service.

 

[MrSquished]

NJ just capped the delivery services margins. My city capped their margins a few months ago, UberEats just added a $3 surcharge to all deliveries in my town. But now that's gone as the statewide mandate is in place and it's less restrictive. We shall see what happens.

 

[brianmanahan]

i've never used it because i have no problem walking somewhere to get some food

also the fees don't really make sense when you're only buying for one person

 

[s0me0nesmind1]

i've never used it because i have no problem walking somewhere to get some food

also the fees don't really make sense when you're only buying for one person

Well, while the delivery fee is usually a flat rate of 2-4$, the "service charge" scales with whatever you buy anyhow.

Either way I agree the fees just aren't worth it which is why it doesn't make a profit.

Overall if I want something that bad - I don't have much of a problem driving a few blocks to pick it up from the restaurant.

 

[Kaido]

also the fees don't really make sense when you're only buying for one person

That's my biggest problem. A $9 sushi roll costs $18 delivered. No way.

I do appreciate having food delivery services available, because sometimes you're in a pinch & just need food, but they've gotta figure out a way to get those costs down. I'd probably use them weekly if they were cheaper!

 

[deadlyapp]

I never used doordash, but then my chase card gave it to me as a perk for free delivery and no service charge, so I've been using it a lot during covid. Will I keep using it in the future? Probably on occasion, but not to the extent that most would feel. I like going out to eat beacuase it makes it more of an experience. Just eating the same food at home doesn't do it for me.

 

[LikeLinus]

We use DoorDash for the same reason. We get free delivery for using my Chase Reserved and they've been good overall.

UberEats? Holy hell I will NEVER use that service again. Word of warning, they are a horrible company who will tell you "too bad", when your food shows up over 2 hours late when their driver decides to pick up the food and drive to the other side of town and spend 45 mins parked in a neighborhood. But because they adjust their times on their website for "delays" they claim it was delivered "on time" and all but told me to go pound sand. I threatened CC charge backs and posting all over social media. They didn't give a crap. Ordered at 5:30, food was picked up at 6PM and we got it at 8:15PM. I promptly threw it in the trash and called. They were awful and do not give a shit about the customer.

The funny thing is, they wanted me to prove the food was bad and cold. They wanted me to take pictures of the food and send it to them. One of the weirdest WTF situations ever.

I got all my money back though, assholes!

 

[s0me0nesmind1]

We use DoorDash for the same reason. We get free delivery for using my Chase Reserved and they've been good overall.

UberEats? Holy hell I will NEVER use that service again. Word of warning, they are a horrible company who will tell you "too bad", when your food shows up over 2 hours late when their driver decides to pick up the food and drive to the other side of town and spend 45 mins parked in a neighborhood. But because they adjust their times on their website for "delays" they claim it was delivered "on time" and all but told me to go pound sand. I threatened CC charge backs and posting all over social media. They didn't give a crap. Ordered at 5:30, food was picked up at 6PM and we got it at 8:15PM. I promptly threw it in the trash and called. They were awful and do not give a shit about the customer.

The funny thing is, they wanted me to prove the food was bad and cold. They wanted me to take pictures of the food and send it to them. One of the weirdest WTF situations ever.

I got all my money back though, assholes!

I had something similar happen one time with UberEats. I watched the driver basically go to a 2nd restaurant after mine and wait 20minutes or so before going to deliver mine. Which means the dickheads are probably doing something where they are using both UberEats and DoorDash (or another competitor) to try to do multiple trips at once. Dickheads.

 

[lxskllr]

I do appreciate having food delivery services available, because sometimes you're in a pinch & just need food, but they've gotta figure out a way to get those costs down. I'd probably use them weekly if they were cheaper!

I'm not sure how they can keep costs down. Too many people (justifiably)getting a cut. When I grew up, delivery service was unobtanium. It was one of those fancy things you saw in movies, but wasn't available. I've built my whole mindset of just handling things myself.

 

[Exterous]

I think we'll see it around for a while - people are lazy. I pretty much never get food delivered because I'd rather my food not get cold while I wait for some driver and I hate the extra fees for places that are a 5 min drive away. So one of the perks for Uber Eats is that all their coupons work for places that allow pickup. 20% off to go pickup food I would have ordered anyway? Yes plz

 

[Kaido]

I'm not sure how they can keep costs down. Too many people (justifiably)getting a cut. When I grew up, delivery service was unobtanium. It was one of those fancy things you saw in movies, but wasn't available. I've built my whole mindset of just handling things myself.

Pizza was the only thing that got delivered when I was a kid.

I was stuck at a client's late the other day & couldn't leave because I needed to be on-site, so I had Friendly's delivered...burger & an ice cream sundae because treat yo'self lol. Amazing. My dream is to make enough money that I can just uber in food for breakfast, lunch, and dinner haha.

 

[Red Squirrel]

I can see it work as there's probably enough people who are willing to pay a premium to get delivery, but what I can see happen is that prices will keep going up. Right now most places charge around $5 for delivery, and that's places with their own drivers. Not sure how much these services like Uber charge but it would need to be more to be profitable I would think. Individual drivers will also only really do well if they get an EV. If you're only making a few bucks per delivery you're spending most of that on gas otherwise. Especially once gas prices go back up to normal. They already started slowly going back up, it's past a buck a litre now. It was down to 99 cents when covid first hit. If you get lucky with deliveries that are not at the other end of town you can probably push 10 per hour, but yeah more I think about it it's probably more like 5 that most drivers will end up doing in an hour. Even if you were getting $5 per delivery out of it (which is far from the case) that's only $25/hour at very most. Realistically they probably only make like $10 or so per hour if that. Assuming the car is running for most of that time, you spent more than that on gas.

I've been trying to reduce my habit of getting food delivered myself. It adds up after a while. 5 bucks for delivery, then 2-3 bucks for tip... sometimes more. Though when I'm on weekend shifts at work I don't have a choice as I can't leave the building. Though there's a diner restaurant across the street so I often get stuff there too. It's leaving the building but it's literally across the street so I just order it ahead of time.

 

[s0me0nesmind1]

Speaking of....

Uber agrees to buy food-delivery service Postmates for $2.65 billion in stock

Uber previously was in the running to buy rival food-delivery service GrubHub, but talks broke down.

www.cnbc.com

.

 

[Fritzo]

I've never had a good experience with any delivery service. They forget bags, get lost, or show up late EVERY SINGLE TIME. DoorDash, UberEats, Grubhub...all of them. I got to the point where I just go get food myself.

 

[shortylickens]

I've never had a good experience with any delivery service. They forget bags, get lost, or show up late EVERY SINGLE TIME. DoorDash, UberEats, Grubhub...all of them. I got to the point where I just go get food myself.

Pizza joints seem to do OK, but everyone else fucks it up. I do not know why.

 

[Mai72]

Wait until Uber automates all of this. Isn't this their end game?

Robot service? Driverless cars? Anything is posible, and imagine the money that could be saved if it was all automated.

 

[Fritzo]

Pizza joints seem to do OK, but everyone else fucks it up. I do not know why.

I know, right? My last order from GrubHub we ordered Chinese food, and they brought us a bag of 3 containers of white rice. They forgot the bag with all the actual food in it. Took 2 hours to get our food for a place that was 10 minutes away, and everything was cold by the time we got it. Time before that a guy from UberEats took our Italian food to another CITY.

 

[s0me0nesmind1]

Wait until Uber automates all of this. Isn't this their end game?

Robot service? Driverless cars? Anything is posible, and imagine the money that could be saved if it was all automated.

True, if they were able to automate and get rid of the uber-driver entirely, that would be a way to go and I can see them being sustainable.

Only problem is people also have a general expectation to bring it to their door instead of walking out to the delivery car. Restaurants would also have to drop the food off in the automated car.

 

[Fanatical Meat]

Yeah it is a low margin service with too many middlemen. I can’t imagine anyone wanting to be involved in this process.

 

[Mai72]

True, if they were able to automate and get rid of the uber-driver entirely, that would be a way to go and I can see them being sustainable.

Only problem is people also have a general expectation to bring it to their door instead of walking out to the delivery car. Restaurants would also have to drop the food off in the automated car.

True, but don't they have robots now that could take the food right to the door.

Imagine that though. That would be a surreal experience.

 

[Fritzo]

Yeah it is a low margin service with too many middlemen. I can’t imagine anyone wanting to be involved in this process.

Seems to have a lot of bottom-feeder middlemen with no training.

 

[Fanatical Meat]

Seems to have a lot of bottom-feeder middlemen with no training.

It does not sure what type of training is needed for a food delivery
I just look at the common model. Pizza place that does delivery. Most in my area do it for free but you need to order $20 or more. Two people involved in that transaction. Shop & driver. Shop provided driver for free because of minimum order, driver gets paid and likely does other things other than drive and then the tip.

Uber model is fee to advertise/transact, fee to driver as in no pay, driver needs to do more more deliveries to be paid (there is no option to sweep floors or clean during down time, shop owner.
Basically you are adding one hand that does low marketing for low margin customers and charges for that, plus a driver who needs to deliver more stuff to make money.

Younger me used to think low end business with high transactions was a great easy way to transact. I have learned that all my previous trainers or reading was correct. You cannot run a business on low margins without either being incredibly lucky or being ruthless about cutting costs, cutting costs as in cutting your pay or comfort.
Yes Walmart & Amazon are amung the lucky who managed to grow to a big enough size to continue but there are like thousands of others who used the same model, had a bad quarter and went bankrupt.
Second thing I wish I knew when I was younger is “effective marketing should attract business you want AND repel business you don’t want” you can’t play in the high & low end pool simultaneously

I just don’t see how Uber’s model can work long term.

 

[sandorski]

I know, right? My last order from GrubHub we ordered Chinese food, and they brought us a bag of 3 containers of white rice. They forgot the bag with all the actual food in it. Took 2 hours to get our food for a place that was 10 minutes away, and everything was cold by the time we got it. Time before that a guy from UberEats took our Italian food to another CITY.

Wow, that's horrid. I have used Skip the Dishes half a dozenish times without problems. Might not be the Service, but the people at fault/deterministic of ones experience.

 

[Red Squirrel]

I think drones would be the best approach to localized food/small package delivery, but the drone rules are too strict, so that makes it hard for anyone to try to get in that business. I could see a big company maybe eventually do it though as they tend to have an easier time getting rule exceptions for stuff like that. My train of thought is if you want drone delivery you would need to install a small pad somewhere with a code on it kinda like a QR code. Delivery drones would use GPS to get to a general location then scan the area for pads until it finds the one with the right address and lands. The drones would need to be smart enough to do proximity checks to avoid power lines, trees etc. So probably lidar or radar etc too. There would also be guidelines as to where you can place a pad, ex: there needs to be a straight path from top to bottom so it can land straight down on it. So they would perhaps not work everywhere. It would essentially be like a mailbox, it's one of those things most people have and it would just become a normal thing.

Downside is having to go out though. That means having to put your coat, boots, mitts etc, maybe even go out and shovel the pad. At that point you may as well just get in your car and go pickup the food.